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Will self-pour beer tech become the next big thing in fast casual?

Editor's Note: This is the first in a three-part series on self-pour technology.

When Charles Byerly visited the Lake Tahoe AleWorx Taproom in South Lake Tahoe, California, he saw something he'd never seen before: a beer wall where customers poured their own beer, without having to place their orders with a bartender and wait for it to be served. Byerly liked what he saw.

"I got excited," he told Kiosk Marketplace, sister site to FastCasual. "I can buy an ounce. I did that." He loved the experience of sampling small amounts of beer from different taps before deciding which to indulge in. The RFID wristband he was given allowed the system, from iPourIt Inc., to charge by the ounce.

"It was funner than hell," Byerly said of the AleWorx 30-tap beer wall, which serves 25 craft beers, three wines, one nitro coffee and one kombucha (a fermented tea drink). He was sold on having a beer wall for his own restaurant, Mary's Pizza Shack in Sonoma, California.

"It's wonderful," Bylerly said just a few days after having a self-pour system installed in his own restaurant. "It's been a hit. A huge hit. Customers love it."

The craft beer revolution is here

This past year was a landmark year for the U.S craft beer market, with the total operating brewery count exceeding 6,000 at year's end. The United States hasn't seen this number of active breweries since the mid-1870s.

Touchscreens can provide instructions on using the system.

The craft beer revolution has changed the beer industry. For many consumers, beer has become a passion — similar to coffee, cheese, wine and cigars.

According to a 2017 year-in-review report by The Brewer's Association, 98 percent of these breweries fall into the small, independent craft brewing category. To be considered craft, a brewery may not surpass producing 6000 barrels of beer within the timeframe of one year.

And by all accounts, self-pour technology has emerged as the leading tool to allow beer lovers to indulge in the variety of craft beers now available. Restaurants, bars and tap rooms can allow customers to explore a wide selection of offerings.

Not only does the self-pour beer wall allow the customer to sample beer at will, but it also enables the restaurant to maximize revenue by offering more variety, including more premium-priced offerings, and it significantly reduces "giveaways" and product waste.

According to industry sources, self-pour beer walls generate as much as 40 percent more revenue than traditional bartenders.

A satisfied restaurateur

Byerly's sales were up 8.6 percent in less than a week after installing his 18-tap beer wall, which offers craft beers along with two ciders. Part of the bump might have come from an article about the beer wall that ran in the local newspaper.

Byerly spoke to three self-pour system vendors before choosing TableTap, a system that issues customers a payment card once they have provided their ID. He said he based his decision largely on the lack of pressure he felt from his salesperson. A three-person TableTap team installed the beer wall within four hours.

For competitive reasons, Byerly didn't want to divulge what he paid for the system, but he said that he believes he can recover his investment within 15 months.

The key thing is the patron experience, said Darren Nicholson, vice president of iPourIt Inc., a self-pour system provider that has served 6.4 million individual users since the company's founding in 2012. "It also gives your patron access to product you might not normally find in a tap room."

How it works

The typical beer wall has 24 taps, Nicholson said, and the self-pour technology consists of software, touchscreens and electronic components that support the self-serve check-in and check-out functions. The touchscreen, which displays information about the brewer, the alcohol percentage, the bitterness rating and the price per ounce, is typically installed above the tap. With the iPourIt system, customers scan their driver's license and receive an RFID bracelet to control the beer tap. Once they have poured a total of 32 ounces, the taps will no longer serve them. They must check with an employee to reactivate their bracelet. When they check out, their credit card is automatically charged.

"They (customers) go to the beer wall five times per visit," said Nicholson.

The system tracks all the data, so Nicholson knows that his average pour size is 4.7 ounces and that the average charge per ounce is 54.5 cents, At an average check of five pours, each average ticket come in around $14.09.. He can also see what beers are selling the best on a daily basis, how the different products are trending over time, and track customer demographics.

The technology, for example, is especially popular with older millennials, Nicholson said, noting that the average user is 32

His customers can even use the iPourIt system to compare their own records of ounces served, pricing and sales against aggregate data the company provides.

Key benefit: Waste reduction

One of the main benefits to establishments is the reduction of waste, Nicholson said. The average keg shrink industrywide is 24 percent, mainly due to improper dispense equipment, excessive foam, improper charging and free drinks. Excessive foam is mainly caused by improper temperature control.

"That is a waste of 476 ounces per keg, on average," Nicholson said.

Given that an average keg holds 1,984 ounces, the self-pour system can save up to $260 of lost profit per keg.Establishments that have deployed beer walls interviewed by Kiosk Marketplace said that another benefit is that it generates more socializing among customers.

One of the most important observations about self-pour technology, according to Nicholson, is that the majority of establishments using it are new to the beer industry.

Part two in his three-part series will explore experiences with different systems.